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Cutting Cable and Satellite: The Big Picture

On our lists of businesses we love to hate, our cable/phone/Internet providers and satellite TV providers rank right at the top, regardless of who it is. The temptation is overwhelming to cut our ties with each and every one of them, and many people have given up landline phones and cable or satellite TV. Many have resolved to cut them in 2016. If you’re thinking about making your great escape, consider the possible consequences.

At first glance, it all seems pretty simple. Get rid of cable and satellite and stop paying for all the channels in your bundle that you never watch. Program providers and carriers such as Netflix, Apple TV, Amazon, Hulu and Roku, to name a few, all stream content over the Internet. Even longtime cable and satellite staples, such as HBO, Showtime and ESPN stream programming, and so do the over-the-air networks. All have charges, and all limit program availability.

So, if you think you are going to save a bundle of money by unpacking a bundle of TV channels, you may be in for some big surprises. A recent article in the New York Times can give you an idea of what some streaming services might cost you if you choose an a-la-carte combination of services. Depending on the services you choose, you could easily hit $100 for very limited offerings. And, just like any provider can suck you in with low introductory prices, you can expect to see prices go up and take you back to Square 1.

In the meantime, despite your monthly cable or satellite bill of $200 or more, you are getting a “deal” by bundling TV, phone and Internet for a certain period of time. When you unbundle your services and just take your Internet connection, you’ll need high-speed service, say 100 Mbps, and that could be $100 per month right there. Verizon’s FiOS service, for example is $44.99 for 50 Mbps and $264.99 for 500 Mbps. On the 50 Mbps plan, you get TV for $30 more per month.

Further, you need to either rent or buy your gateway – or modem and router system – that’s compatible with your Internet provider’s service, and you may need a network of boosters throughout your house to make sure wireless devices get a quality signal in every room. The Wi-Fi modem from Verizon for all packages is $10/month or $199 to own it.

So far, you may argue, we’re not that far off from what we’re paying for our cable and satellite bundles. You’d be correct. But now, let’s look at data caps – because the big providers are looking at them long and hard.

Just like the electricity, natural gas and water coming into your house are measured by a meter, it’s very easy for your data providers to measure what you use. Your cellular carriers already cap your limits, although some are lifting caps, at least for now. They can do that because your phone or tablet doesn’t require as much data to watch a movie or TV show. We bring that up just for comparison.

In reality, data caps are just around the corner. An article in the Motley Fool, which always shows you the money, says Comcast and AT&T are testing programs, and warns that you’re gonna pay. Comcast is testing a 300 GB/month limit in several markets around the country with a charge of $10 per 50 GB over the cap. They are looking at $30 to $35 a month more to go unlimited. AT&T is looking at 150 GB/mo for DSL customers and 250 GB for U-Verse customers. GigaPower fiber customers receive either 500 GB or 1 TB of data each month, and all customers can spend an additional $10 to receive 50 GB of data.

How much will you use? “To put this amount of data in perspective, ArsTechnica recently mentioned a Sling TV report that said if users streamed about 4.8 hours of TV per day they would hit 300 GB of video streaming each month,” the article says. “Data from Nielsen shows that adults in the U.S. spend an average of more than 5 hours watching TV each day. So it would appear Comcast’s data limits are already coming very close Americans’ TV viewing habits. As more viewers start streaming their content (as opposed to watching it through cable or satellite) it’s easy to see how users could start reaching their data limits quickly.”

That ties in with some thoughts in a Yahoo Finance article that looks five years into the future. Cutting the cable appeals to millennials and to any group of people who want to share subscriptions and have a small group of shows they want to watch. And right now, it’s likely cheaper.

However, the inevitability of data caps, expanded tastes in programming and more data-intensive viewing equipment – a really big 4K high-def TV uses a lot more data than an iPad – can easily wipe out those savings. With cable/satellite providers always looking to bundle products to lock in customer commitments, some cord-cutters might want to return to the fold.

“We believe that if consumers knew now what they will know in five years, they would change their mind and go back to the big bundle which costs them $0.25 per viewer hour and gives them 300 channels to choose from at any time,” says a note from financial analysts. The analysts say that putting together your own show list will eventually become more expensive than your cable bill.

If you really want to cut your costs way down and are happy with over-the-air TV, you can buy HDTV antennae for your HDTV TVs. As long as you have good reception, you will get an exceptional picture – and a bonus; many HDTV broadcasters have side channels that can provide extra programming.

As techie as I am, staying with the cable company I hate makes sense for my family of four. But if cutting the cable ditching the dish makes sense for you, we can help make sure you have the right network set up to power the TV sets – as well as the devices you’ll use for viewing. Give us a call – 973-433-6676 – or drop us an email to arrange for a survey.